InternationalBusiness (5)Huang HuipingEconomicSchool.Whut
International Business (5) Huang Huiping Economic School. Whut
Part3Cross-BorderTradeand InvestmentLearningObiectives(Chapter5-6)Review different theories that explain trade flowsbetween nations;Review thevarious policyinstruments usedtorestrict imports and promote the exports;Understand the implications that the Internationatrade theories and the policies hold forbusinesspractice
Part 3 Cross-Border Trade and Investment Learning Objectives (Chapter 5-6) ❖ Review different theories that explain trade flows between nations; ❖ Review the various policy instruments used to restrict imports and promote the exports; ❖ Understand the implications that the International trade theories and the policies hold for business practice
4International Trade4.1 International Trade TheoryMercantilism Absolute Advantage TheoryComparative TheoryH-O TheoryThe Product Life-Cycle TheoryThe New Trade TheoryNation's Competitive AdvantageImplicationforBusiness
4 International Trade 4.1 International Trade Theory ❖ Mercantilism ❖ Absolute Advantage Theory ❖ Comparative Theory ❖ H-O Theory ❖ The Product Life-Cycle Theory ❖ The New Trade Theory ❖ Nation’s Competitive Advantage ❖ Implication for Business
(1)Product LifeCycletheoryMany manufacturedgoods undergoapredictabletradecycle.During this cycle,a nation initially is an exporter, then losesitsexportmarkets,andfinallybecomesanimporteroftheproduct.Aproductgoesthroughfivestages:new-productphase(1)(2)product-growthphase(3productmaturityphase(4)productdeclinestage(5)productdeclinestage
(1) Product Life Cycle theory • Many manufactured goods undergo a predictable trade cycle. • During this cycle, a nation initially is an exporter, then loses its export markets, and finally becomes an importer of the product. A product goes through five stages: (1) new-product phase (2) product-growth phase (3product maturity phase (4) product decline stage (5) product decline stage
The product cycle modelQuantityStage1Stage2Stage4Stage5Stage3(New(Product(product(product(abdicateproduct)growth)decline)market)maturity)！importconsumptionexportInnovatingcountryproductionproductionimitatingexportcountryconsumptionimport0TimeBCD
production Stage 1 (New product) Stage 2 (Product growth) Stage 3 (product maturity) Stage 4 (product decline) Stage 5 (abdicate market) Time Quantity 0 A B C D consumption consumption Innovating country production imitating country export import import export The product cycle model